Spirit Airlines again delays vote on Frontier deal
Spirit Airlines on Wednesday deferred a shareholder vote on Frontier Group Holdings merger offer for the budget carrier until next week.
Its shareholders had been scheduled to finalize their vote at a special meeting on Thursday. The Florida-based carrier said the meeting will now reconvene on July 8.
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This was the second time Spirit has delayed the vote, suggesting it had not convinced enough shareholders to back the deal, which is being contested by JetBlue Airways, Reuters reported.
Spirit signed a cash-and-stock deal with rival Frontier in February to form a new no-frills airline and compete against big national carriers. In April, JetBlue jumped into the fray with an all-cash offer.
Since then JetBlue and Frontier have waged a bidding war. JetBlue’s bid is higher, but Spirit has said U.S. regulators would stop that deal.
A deal with Spirit would allow either bidder to create the fifth-largest U.S. airline and expand its domestic footprint at a time when the the country’s airline industry is dogged by labor and aircraft shortages.
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Spirit has repeatedly rejected JetBlue’s offer, citing the regulatory issues. Still, New York-based JetBlue has been urging Spirit shareholders to vote against the Frontier deal. Its campaign forced Spirit to defer the shareholder meeting, originally scheduled for June 10.
On Wednesday, Spirit said its board would engage with both the bidders about their offers.
Shareholder advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have recommended voting for the Frontier deal, despite JetBlue’s higher offer price.
If shareholders reject the Frontier deal, Spirit has said it intends to remain independent. JetBlue also plans to pursue organic growth if its bid fails.
“With or without Spirit, our future is bright and at the core of our business we have a strong organic plan that will help us win in this changing world,” JetBlue CEO Robin Hayes said in a letter to the airline’s crewmembers.
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